Agricultural Sector Modeling in the Member States and EU: Econometric Modelling for Projections and Analysis of EU Policies on Agriculture, Forestry and the Environment.

AG-MEMOD was founded as Partnership in 2000. Research partners were drawn from 14 EU member countries, while the project is co-ordinated by Teagasc - The Irish Agriculture and Food Development Authority based at the Rural Economy Research Centre, Dublin. In 2002, co-operation could be enlarged by all new member countries from Central and Eastern Europe. This collaborative project aims to build economic models which will measure the impact on EU agriculture of changes in policies and markets that may occur over the next 10 years. The general outline of the model relies first of all on the statistics of commodity balances with its primary (cereals, rape seeds, milk etc.) and secondary (rape meal, milkpowder, cheese etc.) products. Production, stocks, import and export, and the various uses as feed, food, industrial uses etc. are taken as basis. It is then asked how these magnitudes are determinded over the years by technological developments, by changes on the demand side (namely by changing purchasing power of consumers), by prices and last not least by policy intervention. At this stage commodity balances are combined with other statistics such as Economic Accounts of Agriculture, trade and price statistics, and others. It can thus be evaluated what welfare effects arise for producers and consumers and what budgetary costs have to be covered by tax payers to implement policies. Scenarios can be calculated for future developments, taking into account - as much as statistics allow for it - econometric validity and theoretical consistency.